We have audited the accompanying financial statements of Envair
Electrodyne Limited ("the Company"), which comprise the Balance Sheet
as at 31st March, 2015, the Statement of Profit and Loss, the Cash Flow
Statement for the year then ended, and a summary of the significant
accounting policies and other explanatory information.
Management's Responsibility for the Standalone Financial Statements
The Company's Board of Directors is responsible for the matters stated
in Section 134(5) of the Companies Act, 2013 ("the Act") with respect
to the preparation of these standalone financial statements that give a
true and fair view of the financial position, financial performance and
cash flows of the Company in accordance with the accounting principles
generally accepted in India, including the Accounting Standards
specified under Section 133 of the Act, read with Rule 7 of the
Companies (Accounts) Rules, 2014. This responsibility also includes
maintenance of adequate accounting records in accordance with the
provisions of the Act for safeguarding of the assets of the Company and
for preventing and detecting frauds and other irregularities; selection
and application of appropriate accounting policies; making judgments
and estimates that are reasonable and prudent; and design,
implementation and maintenance of adequate internal financial controls,
that were operating effectively for ensuring the accuracy and
completeness of the accounting records, relevant to the preparation and
presentation of the financial statements that give a true and fair view
and are free from material misstatement, whether due to fraud or error.
Auditor's Responsibility
Our responsibility is to express an opinion on these standalone
financial statements based on our audit. We have taken into account the
provisions of the Act, the accounting and auditing standards and
matters which are required to be included in the audit report under the
provisions of the Act and the Rules made thereunder.
We conducted our audit in accordance with the Standards on Auditing
specified under Section 143(10) of the Act. Those Standards require
that we comply with ethical requirements and plan and perform the audit
to obtain reasonable assurance about whether the financial statements
are free from material misstatement. An audit involves performing
procedures to obtain audit evidence about the amounts and the
disclosures in the financial statements. The procedures selected depend
on the auditor's judgment, including the assessment of the risks of
material misstatement of the financial statements, whether due to fraud
or error. In making those risk assessments, the auditor considers
internal financial control relevant to the Company's preparation of the
financial statements that give a true and fair view in order to design
audit procedures that are appropriate in the circumstances, but not for
the purpose of expressing an opinion on whether the Company has in
place an adequate internal financial control system over financial
reporting and the operating effectiveness of such controls. An audit
also includes evaluating the appropriateness of the accounting policies
used and the reasonableness of the accounting estimates made by the
Company's Directors, as well as evaluating the overall presentation of
the financial statements. We believe that the audit evidence we have
obtained is sufficient and appropriate to provide a basis for our audit
opinion on the standalone financial statements.
Basis for qualified opinion
(a) Adequate provision for non recoverability has not been made for
receivables and advances remaining unrecovered and unconfirmed for a
long period of time. Although the management has not ascertained this
amount, the same may extend to Rs. 52 lakhs. Had this provision been
made, the loss for the year would have been higher by this extent and
consequently Shareholder Funds would have been lower by the same
amount.
(b) Provision for gratuity and leave encashment has been made on
accrual basis instead of on actuary valuation basis as is required by
AS 15, and the required disclosures have also not been made in the
Notes to Accounts. The effect of the same has not been ascertained.
Qualified Opinion
In our opinion and to the best of our information and according to the
explanations given to us, except for the effects of the matter
described in the Basis for Qualified Opinion paragraph above, the
aforesaid financial statements give the information required by the Act
in the manner so required and give a true and fair view in conformity
with the accounting principles generally accepted in India, of the
state of affairs of the Company as at 31st March, 2015, and its loss
and its cash flows for the year ended on that date.
Report on Other Legal and Regulatory Requirements
1. As required by the Companies (Auditor's Report) Order, 2015 issued
by the Central Government of India in terms of sub- section (11) of
section 143 of the Act, we give in the Annexure a statement on the
matters specified in paragraphs 3 and 4 of the Order.
2. As required by Section 143 (3) of the Act, we report that:
(a) We have sought and obtained all the information and explanations
which to the best of our knowledge and belief were necessary for the
purposes of our audit.
(b) In our opinion, proper books of account as required by law have
been kept by the Company so far as it appears from our examination of
those books
(c) The Balance Sheet, the Statement of Profit and Loss, and the Cash
Flow Statement dealt with by this Report are in agreement with the
books of account
(d) In our opinion, the aforesaid financial statements comply with the
Accounting Standards specified under Section 133 of the Act, read with
Rule 7 of the Companies (Accounts) Rules, 2014, except as described in
point (b) of the Basis for Qualified Opinion paragraph above.
(e) The matter described in the Basis for Qualified Opinion paragraph
above, in our opinion, may have an adverse effect on the functioning of
the Company.
(f) On the basis of the written representations received from the
directors as on 31st March, 2015 taken on record by the Board of
Directors, none of the directors is disqualified as on 31st March, 2015
from being appointed as a director in terms of Section 164 (2) of the
Act;
(g) The qualification relating to the maintenance of accounts and other
matters connected therewith are as stated in the Basis for Qualified
Opinion paragraph above;
(i) With respect to the other matters to be included in the Auditor's
Report in accordance with Rule 11 of the Companies (Audit and Auditors)
Rules, 2014, in our opinion and to the best of our information and
according to the explanations given to us:
i. The Company has disclosed the impact of pending litigations on its
financial position in its financial statements - Refer Note 16C (a) to
the financial statements;
ii. As informed to us, the Company did not have any long-term contracts
including derivative contracts for which there were any material
foreseeable losses.
iii. There has been no delay in transferring amounts, required to be
transferred, to the Investor Education and Protection Fund by the
Company
ANNEXURE TO THE AUDITORS' REPORT
(Referred to in our above report of even date)
(a) The company has maintained proper records showing full particulars
including quantitative details and situation of fixed assets.
(b) As explained to us, considering the nature of the Fixed Assets, the
same have been physically verified by the management at reasonable
intervals during the year as per the verification plan adopted by the
company, which, in our opinion, is reasonable having regard to the size
of the company and the nature of its assets. According to the
information and explanations given to us and the records produced to us
for our verification, the discrepancies noticed during such physical
verification were not material and the same have been properly dealt
with in the books of account.
2.
(a) The inventory has been physically verified during the year by the
management, which, is in our opinion, at reasonable intervals.
(b) The procedures of physical verification of inventories followed by
the management are reasonable and adequate in relation to the size of
the company and the nature of its business.
(c) On the basis of our examination of the records of inventory, we are
of the opinion that the company is maintaining proper records of
inventory. No material discrepancies were noticed on verification
between the physical stock and the book records.
3.
(a) The Company has not granted any loans, secured or unsecured, to
companies, firms and other parties covered in the Register maintained
under Section 189 of the Companies Act, 2013, during the year.
4. In our opinion and according to the information and explanations
given to us, there are adequate internal control procedures
commensurate with the size of the company and the nature of its
business with regard to purchases of inventory, fixed assets and with
regard to the sale of goods and services. During the course of our
audit, no major weakness has been noticed in the internal control
system.
5. In our opinion and according to the information and explanations
given to us, the company has not accepted any deposits.
6. As informed to us, the Central Government has not prescribed to the
company the maintaining cost records under Section 148 (1) of the
Companies Act, 2013.
7.
(a) According to the records of the Company, the Company is regular in
depositing undisputed statutory dues with the appropriate authorities.
There were no amounts payable in respect of the statutory dues
outstanding, as at the Balance Sheet date for a period of more than six
months from the date they became payable.
According to the information and explanations given to us, no
undisputed amounts payable in respect of Provident Fund, ESI, Sale Tax,
VAT, Income Tax, Customs duty, Wealth Tax, Service Tax, Excise Duty,
Cess and any other statutory dues were outstanding, as at the balance
sheet date for a period of more than six months from the date they
became payable, except property tax amounting to Rs. 6,00,000/-.
(b) According to the records of the Company, there are no dues of Sales
Tax, VAT, Income Tax, Customs Duty, Wealth Tax, Excise Duty, Cess and
Service Tax which have not been deposited on account of any dispute.
(c) The amount required to be transferred to investor education and
protection fund in accordance with the relevant provisions of the
Companies Act, 1956 (1 of 1956) and rules made thereunder has been
transferred to such fund within time.
8. As at the end of the financial year, the company's accumulated
losses exceed 50% of its net worth. The company has incurred cash
losses during the financial year covered by our audit but not during
the immediately preceding financial year.
9. Based on our audit procedures and on the information and
explanations given by the management, we are of the opinion that the
company has not defaulted in repayment of dues to any financial
institution, bank or debenture holders.
10. As informed to us, the company has not given any guarantee for
loans taken by others from bank or financial institutions.
11. During the year, Term Loans have not been raised by the company.
12. Based upon the audit procedures performed and information and
explanations given by the management, we report that no fraud on or by
the company has been noticed or reported during the course of our audit.
For M/S P G BHAGWAT
Chartered Accountants
Firm's Registration Number 101118W
Sanjay Athavale
Partner
Membership Number 83374
Pune:
Date: 27/05/2015
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